George Shultz spoke about his book, "Turmoil and Triumph: My Years as Secretary of State," which was published by Touchstone Books. He presented a personal account of his tenure as secretary of state, from 1982 to 1989, under President Ronald Reagan. In Turmoil and Triumph, he recounts President Reagan's foreign policy, the relationship between the State Department and the National Security Council, and George Bush's involvement in the Iran-Contra affair. Mr. Shultz includes his perceptions of many of the political figures he worked with during his term in office, including Ed Meese, Bill Casey, George Bush, Mikhail Gorbachev, Margaret Thatcher and Yitzhak Shamir.

BRIAN LAMB, HOST: Former Secretary of State George Shultz, author of "Turmoil and Triumph." Early in your book you quote your father, who is no longer living, as saying, "Whatever you do, do what you think is right for you. Somehow the material side of life will take care of itself." And then you say, "I've always followed that advice." Why did you remember that quote?

GEORGE SHULTZ: (Author, "Turmoil and Triumph: My Years as Secretary of State"): Well, it was sort of a vivid thing that he said. And to some extent, I think, my father, who worked his way through college and got a scholarship to go on and get a Ph.D. and study history ,and wound up doing interesting things and writing and so on in his career, but, I think, nevertheless, he always sort of regretted he didn't stay in university life, yes. There's a picture of my father with me when I was about eight years old, I think, and we were visiting San Francisco. And he had been asked to come to San Francisco and help them set up a stock exchange, and he took me with him, and we were visiting one of the famous football stadiums, no longer in existence, in San Francisco.

LAMB: Where were you...

SHULTZ: He took me with him a lot on things. I'd go into his office, when I was older than that, on Saturday mornings -- people worked on Saturdays in those days -- and I'd have stuff to do around the office and then he'd take me out to lunch. And there were the most wonderful triple-decker sandwiches at a restaurant called BMT. I don't know whether it still exists or not, but, boy, they were good.

LAMB: You say in the book you were born in New York City.

SHULTZ: In New York City.

LAMB: How long did you live there?

SHULTZ: Oh, maybe three years or something like that. But what amounted to my grandmother and grandfather. They were my mother's uncle and aunt that brought her up. He was an Episcopalian minister and he had a church in New York City and an apartment there. And we went into that church fairly often and then would have lunch in the apartment, so I kept coming into New York. I liked them. I didn't like going in there on Sundays. I was more active. But anyway, I've always had a kind of orientation to New York City.

LAMB: Where did you spend most of your, you know, grade school and high school years?

SHULTZ: In Englewood, New Jersey. Well, my parents moved out to Englewood -- it's a suburb of New York, really, and my father worked in New York, and was a commuter. And so I was brought up in Englewood and we lived there all through until I went to college.

LAMB: Why did you pick Princeton?

SHULTZ: I liked Princeton, it was nearby. And a very close friend of mine, who wound up as my roommate's father, had gone to Princeton, and there was a certain Princeton atmosphere around. I played football, and, Princeton, back in those days, was a football power, and I wanted to play football at Princeton. And so all of those were attractions.

LAMB: What did you study at Princeton?

SHULTZ: Economics, along with public and international affairs. They had something called the School of Public and International Affairs. It's now called the Woodrow Wilson School. And you combined a major in some discipline, like economics or political science or history or something, with international affairs and/or public affairs, and that was my interest, even back then -- how you apply economics to public policy. And I wrote my thesis about the agricultural program of the Tennessee Valley Authority. I went down and lived with a hillbilly family and tried to find out how it worked.

LAMB: Where did you get your interest in economics?

SHULTZ: Well, I don't know. I guess probably my father, who worked at the stock exchange, was interested in the subject, and I cottoned onto that, and I find it a fascinating subject.

LAMB: In the book you spend a lot of time talking about Russia, the Soviet Union, and all of the people that were surrounding that issue, and I want to relate it to Economics. How did economics play out in the whole change in the world when you were secretary of state?

SHULTZ: Well, I think that the Communist system was a clear failure from the standpoint of the strength of the economy and their ability to use the very talented people and the immense resources they had to advantage. And I have thought that for a long time. I spent quite a little time negotiating with the Soviets when I was secretary of the treasury, and I visited not only Moscow, but some other places and got to know some of the Soviets. And I had said in speeches around Stanford, before I was secretary of state, that their system just couldn't measure up to ours from an economic standpoint and, of course, morally it was a bankrupt system, as Krushchev brought out.

LAMB: Why didn't it work?

SHULTZ: It didn't give people the freedom and creativity that I think they instinctively want. And it was repressive, so it was resented, even though there was control. And I think that in this day and age, a modern economy, big economy, just cannot be managed from the top, and they realize that. I'll never forget when I was in Moscow in -- sometime in early 1987, I believe, I had a meeting with Ryzhkov, who was the premiere, and he was in charge of their economic policy. I'll never forget it; he sat there and he said, "You know what we've been doing? We've been sitting here in Moscow and we've been telling people all over this country exactly what they have to do." He said, "Can you imagine that?" I said, "No, I can't imagine that, but I guess that's what you've been doing, and it's impossible," and he agreed on that.

And then we started talking about their difficulties. And he was oriented to trade and how does the Soviet Union trade more with other countries. And I said, "You have to have a convertible currency if you're really going to be effective in trade." The barter system -- which is what they had to do -- is very inefficient. You do a trade, but it's not efficient trade.

So how do you get a convertible currency? You have to have some sort of a market to be a reflection of that currency, and it has to have some stability, so that it can be traded on markets and people will trust it.

And how do you get that? Well, you're a long way from that. But what impressed me was that he understood they had severe problems, but he didn't have a clue about what to do about it.

LAMB: How many times have you been to Russia?

SHULTZ: Well, I haven't really thought about that question. A lot of times.

LAMB: Would you say 25?

SHULTZ: No, not that many -- maybe 10 or 12.

LAMB: When did you make your first trip?

SHULTZ: In 1973.

LAMB: Under the auspices of the ...

SHULTZ: I was then secretary of the treasury in the Nixon administration.

LAMB: Do you remember what your first impression was?

SHULTZ: Yes. I had been told, endlessly, by the people who briefed me, and the security people, and the CIA, and the people that came to the Treasury Department to tell me about life there that everything was bugged. I couldn't have a conversation that wasn't overheard. There was only one place, and that was in the secure room in the middle of the embassy building. And when I got there, my wife and I were taken to our room in a hotel, and there was a big living room and there was a bedroom and there was a bathroom.

And the Secret Service people that worked in the Treasury and were taking care of me got there a little bit before I did, and the first thing they did was to show me the bugs that they had found in the living room, in the bedroom and in the bathroom. And they said, "We just wanted to show
you these so you would know that we weren't kidding." But they said, "We're not going to bother taking them out because we're sure there are more, and you just have to realize that this is the environment you're living in here." And so I had the experience that I think everybody else had, that you went there and you did what you did, and it was interesting to see what was going on, but when your plane took off, oh, boy, it was a relief to leave that system and get back into the free and open air.

LAMB: You became secretary of state in 1982.

SHULTZ: In July of '82.

LAMB: When was the first time that you dealt with the Russians after becoming
state secretary?

SHULTZ: It was my meeting with Gromyko in September of 1982.

LAMB: What do you remember?

SHULTZ: Well, it was long and laborious. It's reported fully in the book. And it was a beginning. He talked endlessly. He insisted on a consecutive translation, even though he understood English and could have spoken in English. So that meant it -- it went on for a long time. The one thing that happened in that first meeting that was worthwhile was I had said to the president that if something constructive could be started -- there was a real deep freeze then -- I'd like to start it, and I would want to see if there were some subjects that we might work on in a prospective sort of way. So the president agreed with that and we picked out two subjects. One was nuclear non-proliferation, which I felt they would have an interest in, and the other was Southern Africa -- the independence of Namibia, and the things going on in Angola and so on. So he agreed, and we did start work on that.

And the work on nuclear non-proliferation went forward pretty well. On Southern Africa it dawdled along and didn't go anywhere until the last couple of years of our administration. And then -- and this is long after Gromyko had left the scene -- and then in a burst of very creative diplomacy, a man named Chet Crocker, who was assistant secretary of state for African affairs, was our point man and did a great job. But it was an extraordinary burst of diplomacy, and we brought about the independence of Namibia and ended apartheid in that African colony. So that was a triumph.

LAMB: By the way, this is an 1,188-page book. At least, that's how I counted it.

SHULTZ: Well, some of that's index. You don't have to read the index. You can use the index, but you don't have to read it.

LAMB: Did you ever worry about putting out that big a book?

SHULTZ: Yes, I did. And I said to the publisher many times, "You know, it's a heavy book and you ought to cut it in half and put it in a box, two volumes." And they said, "People don't really like it that way. It's too expensive and it's a bad commercial deal." But I've discovered, as I've tried myself in reading thick books, that it's not so bad. And you can do what you're doing -- you balance it on your knee or you can put it up like that or you can put it on a table. There are all sort of ways to do it that makes it very readable and easy.

LAMB: I was going to page 564 and there's a joke, and this is what you write. You're sitting next to, I think, Mr. Gromyko, foreign minister: "Two guys were standing in a long line to buy vodka. An hour went by, then two. One said to the other..."

SHULTZ: This was at a meeting in Vienna, to celebrate the 30th anniversary of the treaty that allowed Austria to be an independent, though neutral state. And we'd -- Gromyko and I had had a very long meeting with a rather interesting outcome, which is in there and I'll tell you about it if you want -- but at any rate, after the thing was over, there was a dinner. And you remember one of the first things Gorbachev did when he became the general secretary, was try to crack down on the drinking of vodka. And, of course, that's quite controversial. So, Gromyko, at this dinner, started telling me about it.

And I said, "Well, sure," and, "I can understand that. And we've had problems in the United States with, particularly, drunk driving and we've been working on it." I said, "But we also had an experience with prohibition that wasn't very happy and it's tough to try to do that." And then I said, "You know, there's already a story circulating that shows how tough it is." And I said, "These two guys are standing in line at a store to buy vodka. And a half an hour goes by, an hour goes by, they're still waiting their turn. They're getting increasingly upset because vodka used to be easy to get. And finally, one of them says to the other, "I'm sick of this. I'm going over to the Kremlin to shoot Gorbachev." So he leaves. Half an hour later he comes back, and his buddy says to him, "Well, did you shoot him?" He says, "Hell, no, the line up there is a lot longer than this one." Gromyko never smiled.

LAMB: When did you notice -- after '82, you were secretary of state -- the first time that you noticed that there may be a change in the attitude of the Russians?

SHULTZ: Well, the first piece of business we did with the Soviets was on the subject of human rights, and it was a very interesting little event. And it started a kind of minithaw, which was really stopped by the Korean airline shoot down. But at any rate, in early February of 1983, I had just come back from a visit to China, which had been a lot of television coverage of it, and it snowed heavily that weekend -- so heavily that President Reagan and Nancy couldn't chopper up to Camp David and they couldn't drive up to Camp David; they were in the White House. So Saturday morning, our phone rang, and it was Nancy, and she invited my wife and I to come to supper with them over in the White House. And, of course, we went.

So the four of us sat around and we had a long discourse of conversation, and I was struck by how interested Ronald Reagan was in Soviet developments and then Chinese developments, and how ready he was to engage with them. He believed in strength, but he also believed that it was important to be willing to negotiate from that strength, and he had a lot of confidence in himself and his ability to do that. And I had, by this time, started a series of very careful meetings with Ambassador Dobrynin, and we did pedestrian things, but it was an effort to get started.

So I said to President Reagan, "I have a meeting with Dobrynin coming up next Tuesday. How would you like me to bring him over here to the White House, quietly, and you can meet with him?" And he said, "That's a great idea." He said, "I don't want him here very long, but I want to tell him that if Andropov" -- who was then the general secretary -- "if Andropov wants to do business, I'm ready." So I found out the next morning that that got the ire of the NSC staff, and Bill Clark called to say he had opposed this and tried to talk the president out of it, but President Reagan had decided he wanted to do it, and he wasn't going to be blocked.

So comes the Tuesday afternoon at 5:00, Dobrynin comes into my office. He's a very able man and quick, and I said to him, "Well, Anatoly, how would you like to go over and meet the president?" "Great." So we went down my back elevator and we went over to the White House, and we didn't have a 15-minute stay; we had about a two-hour stay. And we went up and down the full range of issues between the Soviet Union and the United States with President Reagan carrying the ball, for the most part, and I was a witness and interjected. Talked about arms control, talked about regional tension points and all sorts of issues.

But the president bore down particularly hard on human rights issues. And he made a point of the problem of the Pentecostals. Do you remember the Pentecostal Christians that took refuge in our embassy? And they were there about five years. And he said what a travesty that was, and if the Soviet Union would do something that would allow them to get out of the Soviet Union, that would be important.

So after we left, Dobrynin said, "Well, that's our special subject and let's just work on that quietly, the two of us." About two weeks later, we got a very ambiguous message from them, and then we had a back and forth. We worried a lot about persuading -- the first step was, you had to persuade the Pentecostals to leave the safety of our embassy and go back home where they were at the mercy of the Soviets. And that was accomplished. And by the time late spring, early summer arrived, they had all been allowed to emigrate, along with members of their families, about 60 or so people. And the deal was, Ronald Reagan had told Dobrynin, "If you'll let them emigrate, we won't brag about it and crow about it." So that was the deal, "You let them out and we won't crow." He didn't.

LAMB: How many hours or times did you meet with Mr. Gorbachev?

SHULTZ: Well, I, of course, met with him every time I went to Moscow. So over the course of the time that he was there, from 1985 through 1988, when I was in office, I probably went to Moscow a couple of times a year, so that's, I'm just guessing, five or six times I met him. And, of course, when he came to the United States, I met with him then or when we had the meetings in Geneva or Reykjavik. They were meetings between Gorbachev and Reagan, but I was present and interacted with him a lot.

LAMB: What do you think of him?

SHULTZ: He's an extraordinary, able, bright human being with a broad range of interests. And I think, in the history of the period, will have to go down as a very important figure. I don't agree with, sort of, the assessments that somehow this big change has come about, and Gorbachev did it. I think, to the contrary, that what did it was the strength and cohesion of the United States and our allies, the vision and the sense that we had, and the backbone that we had. And President Reagan exemplified those attributes all through his period, but it predated him.

Harry Truman's Berlin airlift was of a gender with what happened in the Reagan administration. But at any rate, that strength and cohesion, willingness to stand up to the pressures that they exerted, and be able to defend ourselves on the one hand, and the clear superiority of our economic and social system on the other hand, is the fundamental reason why things changed. Now then there was the interaction of Reagan and Gorbachev, and Gorbachev had the guts to recognize that the Soviet system wasn't working and to try to change it. And in the process of developing his ideas about what's the right way to behave with other countries, he exhibited an attitude toward Eastern Europe that encouraged them.

And then I think the strength that we exhibited in helping the Afghanis resist Soviet aggression in Afghanistan, and eventually negotiating them out of Afghanistan, was a very important marker, that it marked the end of the so called "Brezhnev doctrine," in which anything that they grabbed, they held. And that was also a big message around the world. So Gorbachev was the man there and had the courage to see these things, and not to continue to use the Soviet armed forces to do as they did in Hungary and Poland and elsewhere. So he was an important figure, and a big figure.

LAMB: What did you see, with all your meetings behind the scenes, that we have never seen?

SHULTZ: Gee, that's a big question.

LAMB: Well, let me try to pinpoint. I mean, I've read in here enough of your own characterizations, of your own personality behind the scenes, that sometimes you get into a shouting match, periodically, with even the president of the United States, and if you felt strongly about it, and you also talked about the mood swings of Mr. Gorbachev in meetings. And I guess that's what I'd like to have you discuss. Were you two ever at each other...

SHULTZ: With Gorbachev?

LAMB: ...when the cameras weren't there?

SHULTZ: Well, there weren't cameras present at our meetings at all, although there were note takers, so I have -- there is a record of what took place. And in writing this book, I had access to, of course, the memoranda of conversation, so that's reflected, and I put it into conversational form in many of those cases. I think one of the interesting times was in October, 1987, Shevardnadze, the Soviet foreign minister, had been in the United States at the time of the UN general assembly meetings. At the conclusion of our meetings, that went very well, he suggested that when I visited Moscow in October we should set the date for the summit meeting in Washington. That was their initiative.

So I went in October and everybody was focused on the summit and setting the date. It was the press' focus, and it was our focus to a certain extent. And President Reagan very much wanted to have that summit. So I go in for my meeting with Gorbachev when we're to talk turkey about everything, and we had a good meeting. And then came the subject of the summit, and he said -- and I had a sense during this meeting that something had happened. I didn't know -- couldn't put my finger on it, but afterwards I told people in my delegation -- I said, "You know, always before this guy has come on like a boxer who's never been hit, but this boxer has been hit. Something has happened. I don't know what." Anyway, we came toward the end of the meeting and he said, "Well, I'm not so sure that we're ready for a summit meeting." And I felt that he was trying to bargain something out of me as a price for the summit meeting, and I wasn't going to do that.

So I said, "Well, we have this big treaty, the so-called INF Treaty, practically ready to be signed and if you don't want to sign it, we'll figure out some other way to sign it." So I called his bluff, you might say.

And the meeting ended on that note. And as it turned out, a week later, Gorbachev blinked. He sent Shevardnadze to Washington, we set the date, and so on. And at about that time we found out what had happened. That boxer had been hit. There was a big confrontation in the Politburo between Gorbachev and Yeltsin, and Yeltsin was ejected from the Politburo. And Yeltsin, apparently, was saying, "You're not going far enough, fast enough," whereas there were other conservative people -- Ligachev was one -- who were saying, "You're going too far, and you're going too fast." So Gorbachev was being pulled from both directions, but it's interesting to look back and see the arguments that he had, and Yeltsin, and Yeltsin's instinct, even back then, that you got to go further and you got to go faster, and you really got to make this economic reform take hold. And he was right.

LAMB: There's a lot about all this in the book, obviously, but there is a footnote that you all had a meeting in 1991 after you were both out of...

SHULTZ: Yes.

LAMB: ...politics.

SHULTZ: He came out to Stanford and we had a nice visit, and we sat around in my back yard and talked.

LAMB: Is he different? Are you both different when you're not running the show anymore?

SHULTZ: Well, he's the same guy, and I think I'm the same guy in and out of office. I'm me, whatever I am. But he's bouncy and bright. Of course, he's bitter about what happened to him, but he's an agile mind and interesting personality.

LAMB: Where do you live now?

SHULTZ: On the Stanford University campus. It's a great place to live.

LAMB: Are you busy all the time?

SHULTZ: Yes.

LAMB: What do you do?

SHULTZ: I see lots of students, and, of course, I've been writing this book. It's been a huge effort, an interesting effort, but I've put an immense amount of time into it. I've done this at the Hoover Institution, which is a wonderful place for writing, and had a wonderful editor, Cynthia Gunn, who worked with me on this book, and a wonderful archivist who kept track of my papers. And it's a very good setup there and wonderful people to work with. And then I have some business interests and financial interests that I've been doing, so life is good.

LAMB: How did you go about writing this book?

SHULTZ: Well, first of all, I did a lot of work.

LAMB: Did you write any of it yourself?

SHULTZ: Oh, yeah. I wrote and wrote and wrote. I find that it -- well, I did some dictation. It wasn't tight enough, really. I could work from it to some extent. I did a lot of writing on a yellow pad. I had wonderful notes that were taken in my office, contemporaneous notes, that showed me everything as it took place. So I didn't have to remember. See, my memory isn't that great. I had these notes, and I have a fellow named Charlie Hill, who is a very talented foreign service officer -- he's the one who took the notes, and he would cull them out and get the notes on the various subjects, kind of archiving them, I'd say, and putting them into written form, and that was some raw material. The memcons that I mentioned were raw material. I had a research assistant to get the public record material together, and so on. I had my own calender -- everybody I saw, every telephone call, in and out, to look at. And I would go through all this on a given subject and then I'd start to write. And I had an outline and the outline evolved. And when you write, you realize what you need to learn more about to be sure you're right, and so on. So it was that kind of a process.
And then there were lots of organizational work and editorial work. And I would say that from the first draft of this material to the final product, it has been transformed by this editorial process.

LAMB: Is there anything that didn't make it into these 1,188 pages that disappointed you -- you ran out of time, space?

SHULTZ: Oh, no, I think that the important things are all there. There's one incident that somehow or other is not in there, and I don't know why it got left out. But it's an interesting thing that happened. When I was -- in the first period when I was secretary of state, there was in my office a big globe. And when ambassadors, who were newly going to their posts or in their posts and coming back to visit me, would get ready to leave, I would say to them, "Ambassador, you have one more test before you can go to your post. You have to go over to the globe and prove to me that you can identify your country." So unerringly, they would go over and they'd spin the globe around and they'd put their finger on the country they were going to, pass the test.

So Mike Mansfield, great elder statesman in America, former Senate majority leader and who had been ambassador to Japan for a while before I was there, and he was a close friend of mine from back when I was in the Nixon administration -- so he was visiting and he got ready to leave. I said, "Mike, I got to give you the same test I give everybody else. Before you can go back to Japan, you got to show me that you can go over to the globe and put your finger on your country." So he went over and he spun this globe around and he put his hand on the United States, said, "That's my country."

So I've told that, subsequently, to all the ambassadors going out, "Never forget, you're over there in that country, but your country is the United States. You're there to represent us. Take care of our interests and never forget it, and you're representing the best country in the world."

LAMB: How come it didn't get in the book?

SHULTZ: I don't know. I had it in one of my dictated passages and in the editorial process somehow it missed, and I don't know what happened. But it's a good story.

LAMB: There are a couple of names that pop out of your foreword that I wanted to ask you about. One of them is Don Oberdorfer, who wrote -- you say in the foreword, read your manuscript, right?

SHULTZ: Right. I had a lot of people who knew a great deal about what went on. Many of them who worked with me there, who read portions of the manuscript where they were involved, checking accuracy and making suggestions, and so on. And I had four people who read the entire manuscript. Don Oberdorfer was one. He's a reporter for The Washington Post, and had written a book on US-Soviet relations in this period, and had covered me, traveled with me all over the world. And I helped him with his book and I said, "Don, I got a deal for you. How about you reading this manuscript, confidentially, of course, and give me any suggestions?" So he did.

And the three others who did that were Ken Dam, who was my deputy secretary for a while, brilliant man, came from the University of Chicago Law School and was provost there; and George Stigler, who has since died, Nobel laureate in economics and a gifted editor, is a third one; and the fourth was Andrew
Knight, a Britisher who had been editor of The Economist and is now running the London part of the newspaper empire of Mr. Murdoch. So they're four talented people that helped me, and Don Oberdorfer is one of them.

LAMB: I always wanted to ask somebody when they cite those names, did they make a difference? Did you change anything because of what they did when they read the manuscript?

SHULTZ: Oh, yeah, they made a lot of suggestions about length of things and ways of putting things, and a few editorial suggestions here and there. And depending upon the things that they knew about, "Have you thought about this, or have you thought about that?" it was very worthwhile.

LAMB: Another name that pops up in here is Helmut Schmidt, who you refer to affectionately. Why do so many Americans like Helmut Schmidt -- American leaders? You see it pop up in these books.

SHULTZ: Well, I can tell you why I like him. He's a bright, engaging, creative man. And when I was in office as secretary of the treasury, he was the finance minister, and we worked through a lot of tough problems together, and we became close friends. And I saw him when I was out of office and he was chancellor in West Germany. And then he was out of office, unfortunately, as I came in, but I continued to see him. And we're close friends to this day. In fact, I spoke -- he was in New York yesterday and he called me up, and I had a nice chat with him. He's a wonderful, interesting man, and he always has views that are worth listening to about what's going on in Germany, what's going on here and world events.

LAMB: There are some other names in here of people that you refer to that -- it's not as affectionate as Helmut Schmidt, or Jeffrey Howe or some of these others. I'm going to read you just a quote from your book. You wrote this: "Getting close to Jim Wright was not a pleasant experience. He would flash a Machiavellian smile two or three times during a single sentence, at points when his words made a smile inappropriate. It struck me that he thought his smile would soothe and reassure his listener, when, in fact, it was disconcerting and created suspicion." Final line: "He could smile at you while he cut your throat." Why did you write that?

SHULTZ: Well, because it's true, as I see it. He was a very difficult man to deal with. And I describe his, what I call, "rogue diplomacy," in which he tried to deal on behalf of the United States with the Nicaraguan Communists, cutting right across our negotiating strategy and making it difficult to accomplish the things we were trying to accomplish. He eventually cut his own throat by this kind of behavior and lost credibility. But he was an odd fellow to deal with, I thought. It was amazing he became speaker of the House of Representatives. But I thought he was difficult.

LAMB: What did you think of Ollie North?

SHULTZ: Didn't have any particular contacts with Ollie North. I knew about him only by his reputation. I think I've met him once or twice, that's all. So I didn't have any basis for a personal estimate.

LAMB: I ask that because of the whole issue of the National Security Council and the State Department. You were into that. Bill Clark, you mentioned earlier -- Judge Clark, was the national security adviser at one point. You didn't care a whole lot for him?

SHULTZ: Well, I felt that he did not deal squarely with me, and was doing things that were important that I didn't know about and were undercutting my efforts. And then when I found about them, I went in to the president and raised hell about it. And I felt that he was a difficult man to work with for that reason.

LAMB: How much of that goes on behind the scenes -- the dislike for one another in a government like that and in that particular...

SHULTZ: It wasn't really dislike. It's just a question of patterns of behavior that are difficult to accommodate when you're trying to accomplish something. And I suppose that's true in most administrations, and with, just say I know there was a lot of strain between Henry Kissinger and Bill Rogers in the Nixon administration. And I gather there was a lot of strain between Cyrus Vance and Zbig[niew] Brzezinski in the Carter administration. And what will happen in this administration we have now, I don't know, but I suspect there'll be some strains.

LAMB: The George Shultz-Cap Weinberger relationship, when did it start?

SHULTZ: It started back in 1970, when President Nixon appointed me the first director of the Office of Management and Budget. And he said he'd like to have Cap Weinberger be my deputy. I knew quite a lot about Cap and his reputation, which was very good, and I said, "Well, that sounds good, but let me have a chance to talk with him." So Cap came over to my office -- I was secretary of labor at the time -- and we had a very good, engaging talk and, I think, hit it off well. So when I became director of the budget, he became the deputy, and we worked together in that capacity. When I moved on to be secretary of the treasury, Cap became the director of the budget.

And then I left the Nixon administration and went on to the Bechtel Corporation, where I became president after a while. And when Cap left the government, I don't know, maybe two years after I did, something like that, he came to Bechtel and he was our general counsel there. So we had worked together for a long time. And then he became secretary of defense at the start of the Reagan administration, and I came about a year and a half into it. And I suppose you'd say that in our associations up until then, Cap was, in a sense, reporting to me directly or indirectly, whereas when he was secretary of defense we were alongside each other. It was a different kind of relationship.

LAMB: Did you get along until the time -- I mean, on substance, until the time you became cabinet officers at the same time?

SHULTZ: Basically, yes. We had our arguments, like in -- they were good arguments. I think when you're dealing with important issues and trying to work at them, if you have people around you that -- where there's never any argument, you should be alarmed. It's good that you have people with views and willing to fight about them a little bit. When I was the boss I was always able to settle them to my satisfaction. But we argued a lot in the Reagan administration, Cap and I, although on a personal level we remained good friends.

LAMB: What was your reaction when he was indicted?

SHULTZ: Well, I felt that here is a man who had opposed this Iran-Contra effort vigorously and is along in years. I had understood that he was not well. It's a huge burden and expense, and I felt badly about that indictment, and I was glad to see him pardoned.

LAMB: Back to Russia for a minute. There are a couple of instances that you report in here where we, as a government and the press, were wrong and Russia was right. And one of them I want to ask you to explain about was the Sergeant Lonetree incident and what impact that had on our relationship, and when did it -- when did it happen?

SHULTZ: This was the case of a marine who was serving in the Moscow Embassy, and after leaving that, he was assigned, as I remember, in Vienna. And while he was in Vienna, he went to a security officer and said that he had passed on secret information to the KGB, and he wanted to have that known; in other words, he confessed this. What happened to him was that he had a girlfriend, and the girlfriend turned out to be a KGB officer and that's how that happened.

Subsequently, another marine named Bracy, as I recall, allegedly did something similar. And then the story built that these two people had worked together, and when they are on watch together, they had let the KGB roam through our embassy at night and have access to all the secret materials, and so on. And this was a very alarming thing, and it set Washington absolutely on fire and, of course, worried all of us.

And there was a potentially very fruitful period in early 1987, and I was set to go to Moscow, and all this furor was building. Many people said I shouldn't go to Moscow because of the KGB penetration of our embassy; wouldn't be able to communicate and so on. And 60 senators, as I remember -- they voted against my going to Moscow -- maybe it was 70.

LAMB: I think it was 70.

SHULTZ: Seventy, yes, -- in the book. That's the right number. And Cap was opposed to my going and the security people all had ridiculous ideas for how to make things more secure and so on. And the president and I discussed it and he agreed with me that I should go. And I had the most fruitful meeting -- really, a breakthrough meeting in Moscow. I had a lot of progress made on human rights. I took part in a very emotion-packed Seder in our embassy. I had a chance to meet with Soviet intellectuals who were very turned on about glasnost, and they felt as though there was really an opening taking place. I was invited to appear on Soviet television. I said, "I'll appear, but on one condition -- that you carry everything I say, no editing. And you can make the interview as long as you want, but don't edit it." So they agreed, and they stood by their agreement, including heavy criticism of their invasion of Afghanistan. And I said, "You should get out." I was really amazed at that.

LAMB: But they didn't translate that...

SHULTZ: But that gave me --

LAMB: ... the last couple of lines.

SHULTZ: There were a couple of lines that they didn't translate, but they showed everything and they translated most of it. At any rate, that gave me a conviction that change was really happening in the Soviet Union.

But to go back to the beginning of your question, it subsequently turned out that the Bracy so called confession was never signed by him, was totally repudiated by him. We learned that Bracy and Lonetree had never stood watch at the same time in Moscow, so they couldn't have had the collaboration that they had. I recall saying to Gorbachev and to Shevardnadze when I went to that meeting, complaining about the KGB, and they said, "The KGB did not penetrate your embassy." And I said, "Well, we have a different kind of evidence." And they said, "Well, they didn't." But at any rate, before long the whole case evaporated and 70 senators would have had me miss this golden opportunity because of something that wasn't so.

LAMB: You report that the ambassador to Russia from the United States, Jack Matlock, knew that his dining room was bugged, and he used to tell people, "This is the greatest opportunity you have to talk directly to the Russians?"

SHULTZ: Well, this was more Art Hartman's attitude. And you'd go into there ...

LAMB: He was an ambassador, too.

SHULTZ: He was the ambassador before Jack Matlock. And he did not worry as much about the bugging as a lot of people did, and his view was, "I have my briefings here, and this is a way of communicating. They're listening in, so we're telling them what we think." But he also knew that there were things you had to say in private and you didn't want them to hear, and there was a place where you could go do that. His attitude was, "This place is so bugged that if you discipline yourself and you say that you use the bugged places to your advantage, but you're conscious of the need if you have something really secret to say, to go somewhere else and say it." That was his attitude.

LAMB: Is it true that you sang to Eduard Shevardnadze, the foreign minister, at some point "Georgia on my Mind"?

SHULTZ: Well, this was on the occasion of this very tense visit. And the way these visits went, I would fly into Helsinki and spend a day, the purpose of getting my time clock adjusted, getting my delegation to do the same thing. And then we would leave Helsinki very early in the morning, fly into Moscow and start our meetings in a house that the Soviet foreign ministry used for these kinds of meetings -- about 10:30 in the morning. And they typically would have a luncheon about 1:00, and it was semisocial. They'd invite a lot of people beyond those in the negotiating delegation, and they invited our wives.

And, typically, at the end I would give a toast and Shevardnadze would give a toast. So I thought, "I've got to break this up and try to do something different and change the atmosphere a little bit." So I got a tape of a throaty torch singer singing "Georgia on my Mind." And I got three of our Russian speaking people in our embassy to practice up and be able to sing "Georgia on my Mind" in Russian. And then I got the sheet music and the words, and the words translated into Russian, and I gave them to the Shevardnadzes, and then I sang the song, and I had the torch singer sing and I had the three guys sing it, and, of course, it was a -- made a big hit; everybody laughed and enjoyed it.

And when the laughter died down, Shevardnadze -- the Shevardnadzes were from Georgia, I should have said, and I knew they loved their home country -- it died down and Shevardnadze said something that I thought was very interesting. He said, "Thank you, George. That shows respect." I thought it was an interesting remark, that if you feel you've progressed in a relationship enough to have some fun with it, it is, in a sense, a mark of respect.

LAMB: I've heard you talk about how exhausted you were when you left the secretary of state's job. It took you a number of weeks to get your energy back before you started this book. And I want to ask you about that -- about secretaries of state. How do you do it? How do you physically live in that fuselage and go around the world all the time? What kind of techniques did you use?

SHULTZ: Well, I developed a approach to this travel that helped me quite a lot. First of all, don't eat too much for a day or two before you leave, and go easy -- or if at all -- on anything alcoholic. Drink a lot of water while you're traveling. Don't drink anything alcoholic. Don't eat too heavily. And pasta is very good for you. You can digest it relatively easily and you can sleep. And then when you get there, try not to have anything scheduled right away so you can go someplace and lie down. And maybe before you lie down, if there's a swimming pool or a tennis court or something like that, get some exercise just to kind of unkink the muscles. And get a little bit of a rest, and then start in. And I found that while there's always jet lag and you can't get away from it, those techniques helped me quite a bit.

LAMB: Can you remember a time you were so tired that you thought this was a little bit crazy?

SHULTZ: No. I managed to do pretty well with those principles. And if I felt I was too tired and I was trying to do something important, I would just say, "I'm going to have to wait till tomorrow, or I'm just not going to do it."

LAMB: You write about your wife a lot. You also write the story that when you came back to this country after being asked -- I think you were in London -- to be secretary of state, and they said, "There's a helicopter waiting here. We'll take you up to Camp David, your wife can go find a hotel somewhere." You said, "If my wife doesn't come with me ..." I may have the wrong venue, but...

SHULTZ: I said, "It's a package deal."

LAMB: "It's a package" -- why did you say that?

SHULTZ: "We'll both go to Camp David or we'll both go up and go out and scare up a hotel room. Take your choice." So we both went to Camp David. And Nancy Reagan was expecting my wife to come, and they had a good chat. So I said, "Well, this is a lesson on how to handle the White House staff."

LAMB: Where did you meet your wife?

SHULTZ: On Kauai. She was a nurse in the Army in World War II. Actually, she started out for the Philippines and the war broke out, and Kauai is where she stopped. And, subsequently, she went on in and was a part of the invasion of the Philippines with MacArthur. But at any rate, I met her there on Kauai. I came back for rest and recreation. I was a marine, and when you come back as a marine for rest and recreation, what do you do? Well, you say to yourself, "Gee, is there a hospital on this island? There's a hospital, there must be some nurses. Let's go find them." So that's how we met. And then after the war, and I was back and she was back, we hooked up again and we got married shortly after we both returned. We now ...

LAMB: Kids?

SHULTZ: ... have five children and 11 grandchildren. And they're all sensational youngsters. But one in particular is interesting in view of this book. My oldest daughter, about a year and a half ago, went to Russia, and she adopted a one-year-old boy, Sergei. She went out to a town about 200 miles from Moscow called Mitsinsk, and in an orphanage there, she met Sergei and adopted him, along with her husband. And he's back here. He's an American citizen now, and he's a terrific youngster.

LAMB: Why did she do that?

SHULTZ: She wanted a child and she was older than adoption agencies in this country were willing to talk to, and so she started working with agencies that put you in contact with possible children in other countries, and she wound up in Russia. And she did it, I guess, for the same reasons that many people adopt a child -- they want children and they can't have them themselves.

LAMB: What role did your wife play in your career?

SHULTZ: She has always been very supportive, and she has been a good counselor and a good companion, as well as a wonderful mother for my children. And she's a very good judge of people and often has shrewd observations. Of course, when we traveled, she sold us on the idea that you couldn't understand the host country unless somebody in the party went shopping there. So she became the designated shopper. And with five children and mounting numbers of grandchildren, we never bought one of anything. So I say to people that, "Maybe you noticed that after I took office our trade deficit started to widen, and since I left it's come down," and that's the reason.

LAMB: Did she ever bring back to you, after a social evening or just being together with the other spouses, or whatever the circumstances were, diplomatic information?

SHULTZ: Not anything that you'd call secret.

LAMB: I meant just to say ...

SHULTZ: ... espionage-like information.

LAMB: No.

SHULTZ: But she had insights into the way people lived and what was on their minds and how they related to their husbands and their families, and a little social insight that was often very helpful. And she saw more of the sights of the country than I did. In fact, I got to the point -- and a journalist named Bernie Kalb convinced me of this -- he was my press spokesman for awhile -- that I shouldn't spend all my time on visits, meeting with people; that I should take a little time to see historical or cultural things in the place where I was visiting and I would understand better, and, as a matter of fact, it would make a real contribution to the view of the host country of me and of the United States. So I made a practice of trying to do that. But she did have insights as a result of her meetings with spouses in the host country.

LAMB: We're about out of time, but I want to ask you, this is a non-sequitur. On page 1,136 you talk about Ronald Reagan, small town of Dixon, Illinois; Jane Adams' small town of Cedarville; not far from Cedarville, Ulysses S. Grant's home of Galena; and not far from that, Carl Sandburg's, Galesburg. Where did you -- how did you know all those towns were all located in Illinois there?

SHULTZ: Well, I used to live in Illinois. They're all heroes in Illinois, and so they're part of the lure of Illinois. I lived in Chicago for about 10 years.

LAMB: You also wrote about putting some flowers on Boris Pasternak's grave.

SHULTZ: Yes. That was in the same visit to Moscow that I was talking about, where I could see that things were becoming much more open, that real change was taking place. There were many people in the United States, in particular, in the CIA, who said there was no change. But I could see it for myself, so I was convinced that there was change. And that was one of the things that I was allowed to do, which wouldn't have been possible earlier.

LAMB: We, obviously, just got started. This is 1,188 pages. This is what the book looks like. Our guest has been George P. Shultz, former secretary of state, and the book is called "Turmoil and Triumph." Thank you very much for joining us.

SHULTZ: Thank you.

Copyright National Cable Satellite Corporation 1993. Personal, noncommercial use of this transcript is permitted. No commercial, political or other use may be made of this transcript without the express permission of National Cable Satellite Corporation.